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New “start-up” business visa - what’s it all about?

24 September 2018

Brexit is scheduled to happen in less than six months’ time. Anyone who reads the papers will be aware of the political complexities involved and it is very difficult to predict on what terms the UK will leave the EU. But, in whatever way it comes, the UK is going to have to stand more on its own feet than it did previously and it is going to have to fight harder for international business.

Bearing this in mind, it seems that the Home Office is consistently shooting itself in the foot. The Tier 1 Entrepreneur visa is, or should be, just the sort of vehicle that the UK needs to (a) attract some financial investment into the UK and (b) attract good entrepreneurs to the UK who can help the economy prosper.

But, as everybody knows, the Tier 1 Entrepreneur visa application is very hard and the failure rate is very high. One might get the impression that the Home Office is working hard to try and stop entrepreneurs coming here rather than attract them. A few years ago they amended the immigration rules to introduce a bit of flexibility into the notoriously complex requirements for evidence but the results seem minimal. Something has gone wrong somewhere, and it must be the case that many good potential entrepreneurs have failed in their applications or just been put off by the whole thing.

But might there be a chink of light, a way out of this seemingly intractable problem? Well, just possibly. The Home Secretary has announced a new business visa "start-up" scheme. As the Home Office website puts it:

New start-up visa route announced by the Home Secretary

It sounds vaguely exciting, although the details are sparse. But we latched on powerfully to a few special and precious words: "the new visa application process will be faster and smoother".

We are hampered by the fact that we know so little about the new visa. What we do know is that successful applicants will require endorsement from an authorised body but what we do not know is what level of investment applicants might be expected to provide. But if the visa application process really turns out to be faster and smoother than the Tier 1 Entrepreneur visa process this in itself might make it hugely attractive.

And some other words in the Home Office announcement were of interest: "It will replace a visa route which was exclusively for graduates, opening it up to a wider pool of talented business founders."

As far as we can interpret this, it means that the new visa route will replace the Tier 1 Graduate Entrepreneur route. This visa route is a kind of initial stage entrepreneur visa which is of course limited to graduates but the Home Secretary clearly informs us that new visa route will be open to non-graduates as well.

The new visa is supposed to come into effect early next year. This is when Brexit should happen, so the timing may be fortuitous. And so, if our assumption is correct, at this time the Tier 1 Graduate Entrepreneur visa will go and the Tier 1 Entrepreneur visa and the new start-up visa will co-exist side-by-side.

We suspect that the new visa must offer something different to aspiring entrepreneurs, additionally to being allegedly faster and smoother to acquire. The Home Secretary made the announcement at London Tech Week, which was a major week-long event designed to "inspire creativity and foster collaborations" in the tech world and to promote London as a world tech centre.

It may therefore be that the new visa will have a bias towards tech/IT industries; certainly some of the language used rather suggested this. It is a well-known thing that - for whatever reasons - the UK simply does not produce enough tech/IT specialists. It is another well-known thing that international companies with branches in the UK recruit a lot of such skilled specialists under the Tier 2 Intra-Company Transfer route, particularly from India.

To promote a nice entrepreneur visa to encourage such non-EEA skilled people to come to the UK and set up their own businesses, rather than work as employees for already-established foreign-owned businesses, would make sense. Such entrepreneurs (unlike Tier 2 ICT migrants) could be on a route to settlement and British citizenship and their businesses activities would thus truly become part of the UK realm.

Anyway, speculation can only take us so far; we will keep you informed about the new start-up visa when details emerge.